Evolution In Expectations Of Branches Creating A Staffing Dilemma
NEW YORK-Financial institutions need part-time help to fix a big-time problem: branch costs disproportionate to a dwindling number of customer and member visits.
As account-holders increasingly migrate online, full-time workers are that much more idle, but with locked-in wage costs and benefits, according to American Banker, an affiliate of Credit Union Journal.
The move is an about-face considering part-timers were among the first layoffs prompted by the financial crisis. But financial institutions and their customers and members are wedded to branches for certain activities, and if an institution can't close them down, they can at least limit their adverse effects on the bottom line.That means the type of workers institutions could spare as the economy collapsed-homemakers and students with time to work flexible hours-are becoming more valuable as it recovers.
According to American Banker, people still want a place to open an account or ask for advice about saving for college, even though they're doing more banking online. Yet many institutions didn't build a lot of branches in the last 10 years primarily to meet those needs, experts said.
Most of the roughly 98,500 bank branches in the U.S., for instance, were made for cashing Friday's paycheck: think rows of teller stations and some semiprivate cubicles off the lobby. The justification for that kind of operation is deteriorating. "Branches were initially designed to basically get checking accounts. They were funded by the fee business," said Darryl Demos, a managing director with the consultancy Novantas.
Demos said his clients are rattled by what's happening at branches, which tend to account for more than half of expenses.
People are going into them less, but industry research shows consumers want lots of branches; it's the the No. 1 factor cited when picking an institution. The average bank branch booked fewer than 9,000 transactions a month in the first half of 2010, Demos said. During the first six months of 2007, the per-branch transaction average was more than 10,000, according to his firm's in-house surveys and client data. The average is on track to fall below 8,000 in 2013, Novantas said. The takeaway: branches are being used less often and for different reasons. So paying three or four people to work eight-hour shifts handling transactions makes less sense, especially as technology simplifies the teller's job.
"What I think more banks are going to do is hire more part-time people. They'll staff up over lunch and late" afternoons, said Robert Meara, a consultant with Celent, adding that skeleton crews will be used at other times.. There will be fewer full-time tellers and more sales-oriented staff to handle consumers who still go to branches frequently.
If that all sounds simple, it isn't.
The changes involve people and infrastructure. Banks and CUs have to decide which locations to remodel and outfit with teller-replacing technology. None of it is cheap.
Finding reliable part-timers can be tough, especially when they have to be adept at multiple tasks like processing transactions and fielding service questions. Temporary employees are not what banks are looking for, either, because they need permanent, properly trained workers.
"Teller staffing is sort of an age-old art and science," Moore said. "The problem with part time is you can run into trouble on the service. ...You have to be real careful not to suffer on the quality side."